The Nation Article Regarding Planning for “Mega” Infrastructure Projects

by trenzpruca

Flooding of Rojana Industrial Park, Ayutthaya,...

Flooding of Rojana Industrial Park, Ayutthaya, Thailand, October 2011 (Photo credit: Wikipedia)

I have followed with interest the ongoing reports regarding the “Mega Projects” being proposed to ameliorate Thailand‘s periodic flooding problems.

As one of the principle draftors and administrators of California’s massive Coastal Plan and Program and past Chairman of California’s High Speed Rail Authority, I have gained some experience in reviewing the design and impacts associated with Mega projects and flood plain planning. It has been my experience that there are a number of reasons why these type of Mega projects may, in the long run, fail and prove  too costly for the nation. Here are a few:

1. Among the many studies that will be undertaken, each project will be subjected to risk, cost-benefit and similar analyses. They will, inevitably and reasonably, force the project to be  sized below that necessary to handle the very crises that caused the project to be considered in the first place. For example, in building a project with a life of say thirty years because of fear of a 100 year flood, at some point it will be demonstrated that the cost of building something that has only about a 1/3 chance of being needed and must be rebuilt 3 times is unreasonable and some smaller sized project would be more appropriate. (This problem has plagued, for example, the debate on the level of earthquake protection needed for Nuclear power plants. To build to a level adequate to handle the ultimate reasonable earthquake size often would be prohibitively expensive and unreasonable, so you build to some lesser standard. But, inevitably somewhere, sometime the worst will happen.)

2. These projects often imply, if not require, additional development in the flood plain. The increased water flow caused by the new development into the proposed project will inevitably be underestimated.

3. Retroactively armoring of existing development in the flood plain to protect them from the next flood will increase the water flow at the time of flood, because the reason they flooded in the first place is that the water needed some place to go. This means that the flood waters will either find new places to flood, flow with increased velocity thereby producing greater damage or flow into the Mega projects that inevitably are not sized to account for all of this additional water. Ironically, the armoring itself for more or less the same reason as described in 1. above, will usually be too puny to resist the ravages of the size of the flood that prompted their construction.

4. Allocation of funds for operation, maintenance and replacement often will not be included in initial public cost estimates of the project but assumed to be provided from ongoing revenues, some of which would be expected to come from revenue produced from increased development of the flood plain. Even if they were included and allocated to some extent in the original project costs, they generally will be underestimated, because to include them in current funding would usually render the project not feasible.

What this means is that these mega projects require and are often intended to promote economic development in the flood plain itself and not simply to protect existing development. If  protection of existing property were the goal, the projects almost always would be clearly unaffordable. If  intended to also finance enough growth to pay for themselves, many studies in the US and elsewhere have demonstrated, in a frighteningly large number of cases, they do not.

Remember, operation and maintenance funding must come from somewhere new or the project itself will drain national revenue. As for replacement, one should also be aware that the cost of replacement includes the inflation cost on labor and materials over the years, as well as the interest on the financing of the original project that have not been paid at the time the replacement project commences. Typically when upgrading or replacing infrastructure projects like these there inevitably will be unpaid costs from the original project either because the term of the bonds exceed the expected life of the project or the bonds have been refinanced to reduce current outlays. In the American infrastructure project studies these financing issues often either bankrupted the local entities or required significant, unexpected and at times calamitous increases in taxes. I suspect a large portion of the European sovereign debt crisis can be traced not to lending for the ongoing operation of social programs or general government but on failure of the Mega projects, that were also financed with bonds, to produce the growth expected.
Here in Thailand, you have perhaps the worlds greatest, most innovative, insightful and creative authority on the protection and allocation of the water resources of a nation His Majesty the King. It is a great disappointment to me that some of those who most claim to respect him ignored him on this issue. He seemed well aware that if you are going to eliminate the natural drainage system, you have to develop the equivalent of an alternative flood plain somewhere. His statements over the years were not simply advice and warning, but predictions based on fact and his proposals not simply suggestions but requirements.

The issue is complex and requires more discussion than the format permits. I apologize for its incompleteness, lack of specificity and  brevity of its analysis.

(This post originally appeard in “The Nation” newspaper in Thailand.)